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EU to consider cutting VAT on green goods after all

• Mark Mardell
• 14 Mar 08, 02:35 PM

Watch me eat my words.

Gordon Brown has got what he wanted on VAT and it's far more than any of us in Brussels expected.

Only a few hours before, people in the commission were saying that he couldn鈥檛 just appear with a new form of words on Day Two of a summit rather than go through the lengthy preparatory meetings.

The final text isn鈥檛 out yet but I understand it will be along the lines of 鈥渢he European Council asks the commission to come forward with legislative proposals to examine whether VAT can play an important role in encouraging the use of energy efficiency goods鈥�.

A gloating Downing Street aide made those of us who鈥檇 got it wrong squirm as he pointed out that the letters 鈥淰AT鈥� were in the text twice.

The suggestion is that this is in return for giving the Germans something on 鈥渆nergy intensive industries鈥� but I haven't got the latest on this yet.

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Why Mr Brown needs mechanics to fix the EU

• Mark Mardell
• 14 Mar 08, 11:27 AM

Gordon Brown鈥檚 proposals have been slapped down.

At last night's news conference, cold water was poured on the idea. Mr Brown got hardly any support from his fellow prime ministers and presidents at the dinner.

A planned joint letter with President Sarkozy hasn鈥檛 emerged. It all came as a bit of a shock to Number Ten. They are now working hard to get some form of words in the official conclusions that at least look as if they could nod towards the idea.

Why this failure? After all the mood here,
But it seems little of the spadework has been done. Although Mr Brown has certainly talked about this before, it's not a running campaign, and seems like an idea whistled up in the last few days. There has been no real effort to get people here in Brussels or the capitals to lend their weight to it.

Deadly mechanics

It is all rather odd. In Westminster, at least in the many years I watched him, Mr Brown employed mechanics. Not in the American sense of hit men, although they could be deadly.

These were people, often former trade unionists turned MPs, who loved rolling their sleeves up and getting covered in oil as they tinkered with the engines of power. They knew exactly how things worked, and how to make things work for them.

They reminded me of Scotty in Star Trek, jerry-rigging the warp drive to get a few more ounces of power out of it so the Captain could get out of his latest scrape.

They would shout up to the bridge: 鈥淚鈥榲e done all I can: I can give you a few extra votes, but it cannae hold much longer!鈥�

The Captain would back Mr Blair into a corner with a putative rebellion, get the general secretary of his choice, or whatever conference vote he wanted fixed.

Free-floating charisma

It was all rather different to Mr Blair's style of apparently free-floating, charismatic exhortation.

But Mr Brown doesn鈥檛 use the mechanics based here in Brussels.

The don鈥檛 look or sound much like Scottish trade unionists, and I suspect Mr Brown doesn鈥檛 have much time for the Foreign Office.

But he shouldn鈥檛 be fooled by the double firsts and summer dresses. These urbane alchemists are in essence the same as the mechanics.

Like the mechanics back home, they know which wires carry the power, when to cut them or cross them, when to sweet talk and when to talk tough.

When I have suggested in the past that Mr Brown might get more out of the EU if he engaged a bit more, some of you have taken that as pro EU bias.

I think this case shows why it is not. Mr Brown has a policy objective, to lower VAT on certain goods. He could, of course, achieve that by withdrawing Britain from the EU or the VAT regime.

But that is clearly not his policy and indeed he has made it clear in an interview with me that he thinks it's appropriate to set VAT at a European level. So if he wants to get his way, he has to get the support of other leaders and the commission.

And to do that he's going to have to learn to trust and use people who understand the set of tools that allows you to tinker with the Brussels machine.

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Europe's leaders chew over the financial turmoil

• Mark Mardell
• 14 Mar 08, 05:21 AM

It鈥檚 a natural reaction to pull the shutters closed when it's blowing a gale outside.

But at this summit Gordon Brown is determined to persuade his colleagues that, while the world's financial system may be suffering something a little more serious than bracing fresh air, they mustn't batten down the hatches.

In the first round of talks here, Europe's leaders have been chewing over .

The form of words that they're discussing is full of suggestions that the EU should stand ready to take "regulatory and supervisory actions" and develop "improved tools for financial crisis management".

They're also talking about the increasing role of investment by oil-rich countries. at the end of June on these Sovereign Wealth funds.

But Gordon Brown is worried that some leaders who want to beef up the rules may send exactly the wrong signals in a crisis when investment is scarce.

He's concerned that Europe could look inward and protectionist, and I am told that is what much of the discussion on Friday will be about.

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